At 25% discount, profit% was 25%, at 10% discount, profit% will be ___________%. Assume marked price and selling price remains same.
- AOption (a)
50
- BOption (b)
30
- COption (c)
60
- DOption (d)
40
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Correct answer
50
Why this answer is correct
Shortcut Trick
Ratio of CP to MP is given by (100 − D%) : (100 + P%).
Initial case: CP : MP = (100 − 25) : (100 + 25) = 75 : 125 = 3 : 5.
New case: D = 10%, so New SP = MP × (100 − 10) ÷ 100 = 5 × 0.9 = 4.5 units.
New Profit = New SP − CP = 4.5 − 3 = 1.5 units.
New Profit% = (1.5 ÷ 3) × 100 = 50%.
∴ The correct answer is 50%.
Alternate Method
Formulas: CP = SP × 100 ÷ (100 + P%) | SP = MP × (100 − D%) ÷ 100 | Profit% = (SP − CP) ÷ CP × 100
⇒ Let Marked Price (MP) = 100 units. ⇒ Initial Selling Price (SP1) = 100 − 25% of 100 = 75 units. ⇒ Profit is 25%, so Cost Price (CP) = SP1 × 100 ÷ 125 = 75 × 100 ÷ 125 = 60 units. ⇒ New Discount = 10%, so New Selling Price (SP2) = 100 − 10% of 100 = 90 units. ⇒ New Profit = SP2 − CP = 90 − 60 = 30 units. ⇒ New Profit% = (30 ÷ 60) × 100 = 50%.
∴ The correct answer is 50.
Additional Information
CP, MP, and Discount Relation
The formula CP/MP = (100 − D%)/(100 + P%) is a direct result of equating CP × (1 + P) = MP × (1 − D).
Marked Price & Discount
Marked Price is the price printed on an item. Discount is always calculated on the MP to arrive at the Selling Price.
